WTI under pressure after API announces surprise build in US crude stocks

Eren Sengezer FXStreet

Crude oil came under a broad-based selling pressure in the post-settlement trade on Tuesday after American Petroleum Institute's stock report revealed a surprise build in U.S. crude stocks. The barrel of West Texas Intermediate quickly lost 0.7$ after the release and is now trading at $48.75, losing 2.75% on the day.

"Crude inventories rose by 1.8 million barrels in the week ending July 28 to 488.8 million, compared with analysts' expectations for a decrease of 3 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.6 million barrels, and refinery crude runs rose by 142,000 barrels per day, API said," Reuters reported.

On Wednesday, investors will look at the EIA's stock report for fresh clues on crude oil production in the U.S. After dropping by 7.208 million barrels in the previous week, crude oil stocks are expected to drop further by 2.9 million barrels for the week ending July 28. Today's report could ramp up the expectations for a smaller draw or even an increase in crude inventories, which could put more pressure on the barrel of WTI.

In the meantime, the fact that the latest report showed that output by the Organization of the Petroleum Exporting Countries (OPEC) rose in July despite the cartel's agreement to reduce production suggest that the high oil supply is likely to continue to weigh on the prices.

Technical outlook

$50 (psychological level) remains as a critical hurdle for the barrel of WTI ahead of $51.05 ahead of $52 (May 25 high). On the downside, supports could be seen at $47.85 (Jul. 26 low), $46.40 (Jul. 25 low) and $45 (psychological level).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.